What is the relationship between the short-run Phillips curve and the long-run Phillips curve?
What will be an ideal response?
Along the short-run Phillips curve, the expected inflation rate is constant. When the expected inflation rate changes, the short-run Phillips curve shifts. The long-run Phillips curve is a vertical line at the natural rate of unemployment. The short-run Phillips curve intersects the long-run Phillips curve at the expected inflation rate.
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Both sugar and fructose can be used in the production of candy. If the price of sugar increases,
a. the demand for sugar increases b. sugar becomes relatively more expensive than fructose only if the price of fructose falls c. sugar becomes relatively more expensive than fructose, other things constant d. the price of fructose immediately increases e. the price of fructose immediately decreases
In the aggregate expenditures model, a tax increase causes a(n):
a. upward shift in the aggregate expenditures curve. b. downward shift in the aggregate expenditures curve. c. shift in the 45-degree line. d. rightward movement along the aggregate expenditures curve. e. leftward movement along the aggregate expenditures curve.
When comparing the slopes of the aggregate-demand and aggregate-supply curves to the slopes of demand and supply curves for specific goods and services, the explanations are
a) the same for all the curves. b) quite different for the aggregate curves from the specific market curves. c) the same for the demand curves but not the supply curves. d) the same for the supply curves but not the demand curves.
Modest shifts of the market marginal cost curve will have no impact on the production decision of a monopolistically competitive firm.
Answer the following statement true (T) or false (F)